Sunday, June 16, 2019

David Abrams on catalysts and growth

We buy things with what we call a hard catalyst; so some kind of event that's going to close the gap between what you bought it at and what it's worth.  
We also buy things where there's no catalyst; so we're just owning businesses.  
In the first category, if there's a catalyst, we don't need that much growth. We need to buy it cheap and get out.  
In the second category, where there's no catalyst, we absolutely need growth. And now the growth can come in all kinds of ways. It doesn't have to come through increased revenues, although a lot of times it does. It can come from running operations more efficiently. It can come from acquisitions. It can come from buying back shares really cheap. But if there's no catalyst, we absolutely need growth.